Great news for home loan borrowers! Following the Reserve Bank of India's (RBI) recent repo rate cut, six major banks have reduced home loan interest rates, making borrowing more affordable.
On February 7, 2025, the RBI’s Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points (0.25%), bringing it down to 6.25%. This marks the first reduction in two years, providing much-needed relief for home loan borrowers.
As a result, several banks, including Canara Bank, Punjab National Bank (PNB), Union Bank of India, and Bank of Baroda, have lowered their Repo Linked Lending Rate (RLLR) by 0.25%, making home loans cheaper.
RLLR is the benchmark interest rate at which banks lend money to customers. It is directly linked to RBI’s repo rate, meaning when RBI lowers the repo rate, banks can reduce home loan rates accordingly.
Most floating rate home loans are tied to RLLR, so any change in repo rates directly impacts loan EMIs and tenure. Borrowers now have the option to either:
✔ Reduce their EMI
✔ Shorten their loan tenure and save on interest
🔽 Canara Bank
➡ New RLLR: 9.00% (Earlier: 9.25%)
➡ Effective from: February 12, 2025
🔽 Bank of Baroda
➡ New BRLLR: 8.90%
➡ Effective from: February 10, 2025
🔽 Bank of India
➡ New RLLR: 9.10% (Earlier: 9.35%)
➡ Effective from: February 7, 2025
🔽 Union Bank of India
➡ New RLLR: 9.00% (Earlier: 9.25%)
➡ Effective from: February 11, 2025
🔽 Indian Overseas Bank (IOB)
➡ New RLLR: 9.10% (Earlier: 9.35%)
➡ Effective from: February 11, 2025
🔽 Punjab National Bank (PNB)
➡ New RLLR: 9.00% (Earlier: 9.25%)
➡ Effective from: February 10, 2025
🏠 Lower EMIs: Borrowers can expect reduced monthly installments, making home ownership more affordable.
📉 Lower Interest Costs: Those who keep the same EMI can reduce their loan tenure, helping them pay off their home loan faster.
💰 New Borrowers Get Cheaper Loans: Prospective homebuyers can secure loans at lower interest rates, reducing their overall borrowing costs.
✔ If you already have a floating rate home loan, check with your bank about the new rate and request EMI adjustments.
✔ If you are planning to take a new home loan, compare revised interest rates before applying.
✔ Consider switching to a lender offering better rates if it helps reduce your total interest burden.
The RBI repo rate cut has triggered a wave of home loan rate reductions, making borrowing cheaper. This move is expected to boost the real estate market and make homeownership more accessible for thousands of buyers.
For more updates on banking and finance, stay tuned!
